Dilemma; Rent or Sell?

peter12345678910

To do the tax is quite straight forward for 1 rented property. You simply ring inland revenue, and get the details ready from the start of the tax year, not as simple as telling them the rent and other details, but much easier than a tax return, then they give you a new tax code.

If you use a renting company, they would normally do the gas check, but some are better than others such as Paul Carr. But I would not recommend John Sheppard.

AnotherJoe

In general I think it's a bad idea for people letting out houses they randomly inherit (which you have sort of done) but you do seem to have the ability and be in the locality to make this more practical, plus you like the house and might move into it yourself at some future date, so letting it out now seems reasonable and as said by another poster you can give it a go and see what happens.

Pixie5740

Out_Of_Darkness_2 wrote: »

Yes, and then I only need to find an investment/savings product that returns the same potential yield as renting ..... not sure it exists LOL!

Actually the gross rental yield for this property is not particularly impressive. At best (£180k value plus another £5k spent on the property and a rental income of £700 pcm) your mum is looking at a gross rental yield of 4.5% and that's before taking into account void periods. There are plenty of investment and savings products out there that could easily beat that and don't come with the hassle of tenants.

Would your mum even see the £5k to £10k back if she did up the property in order to let it out for an extra (gross) £50 pcm?

Is there even a lot of demand to rent properties like your mother's?

Out_Of_Darkness_2

Wow, thanks for your replies everyone - you've given me a range of perspectives and brought up a lot of issues I hadn't considered yet.

I'll keep thinking!

AnotherJoe

Pixie5740 wrote: »

Actually the gross rental yield for this property is not particularly impressive. At best (£180k value plus another £5k spent on the property and a rental income of £700 pcm) your mum is looking at a gross rental yield of 4.5% and that's before taking into account void periods. There are plenty of investment and savings products out there that could easily beat that and don't come with the hassle of tenants.

Would your mum even see the £5k to £10k back if she did up the property in order to let it out for an extra (gross) £50 pcm?

Is there even a lot of demand to rent properties like your mother's?

What savings product could easily beat 4.5% on £180k? Because I'd buy that.

Out_Of_Darkness_2

Yes, I haven't found it yet LOL

I think an appointment with an IFA is on the cards ...

Bluebirdman_of_Alcathays

You can get 12% on a P2P investment without looking too hard. Even a bog standard ftse tracker has beaten 4% just about every year. As pixie mentions 4.5% is gross, there will be voids repairs and tax to come out of that. As such keeping it is just a gamble on house prices, I would be liquidating pronto.

Cakeguts

Large gardens in rental properties are not a good idea. If you want to keep the garden in good condition you are going to need to pay for a gardener to do it.

How much off street parking does it have? Is there space for 2 cars? If not what is the local on street parking like?

It doesn't sound like a property that is really suitable as a rental. Not all properties work well as rental properties. Cosmetic improvements won't make as much difference to the rent as you seem to think they will. You have been told that the price you can achieve is £650. That is based on what tenants are looking for in that area.

Good rentals in your area that are what tenants are looking for that rent for £650 will be worth a lot less than £180K. The ones worth 180K will have much higher rents than £650. What this means is that you will not get the pick of the good tenants for this house.

peter12345678910

I would think slowly about this, this is actually a very difficult thing to do. In my experience of life, heavy things need light and quiet thinking which is different to the heavy forum style of seeking advice.

Though I would not be too concerned about the large garden some renters may be interested in gardening and it could be worth giving permission to grow and maintain the garden.

glasgowdan

Would any of her benefits be affected if the house was sold leaving her with 200k in cash?

Is the house lettable as a short term holiday property? Higher income, more regular intensive management but more freedom to change use or free it up for visiting family.